7 CFR § 1786.53 - Discounted present value.

The Discounted Present Value shall be calculated five business days before prepayment is made by summing the present values of all remaining payments by using the following formula:

$\text{Present Value}=\sum _{k=1}^n\frac{P_k}{\prod _{i=1}^k\left[1.0+\langle \frac{{D1}_i}{365}+\frac{{D2}_i}{366}\rangle \times I\right]}$

Where:

Pk = Total payment including interest, due on the k th payment date following the prepayment date.

n = Total number of remaining payments dates.

I = The discount rate, in decimals, which shall be the average rate on utility bonds bearing a rating of “Aa” as set forth in that issue of Moody's Public Utility News Reports most recently published prior to the date on which Discounted Present Value is calculated.

D11 = Number of days in the i th payment period that are in a non-leap year (365 day year).

D2i = Number of days in the i th payment period that are in a leap year (366 day year).